lavalyn observes stuff:
Black doesn't need to live inside to kill White - only ensure White doesn't have 2 eyes. So Black prepares to sacrifice some more stones to ensure this occurs.
In this position, White is unconditionally dead - thus, Black should tenuki!
Like the corner pseudo-seki, this group must die - to capture the five black stones leaves White with a bulky five shape. White can be put into atari at Black's leisure - that's not even necessary of course, but possible.
This time around, Black prepares to make a rabbitty six in White's eyespace - and it looks like he succeeded.
Of course, even if both were deaths, the first solution is superior - no ko threats afterward in the position, whereas in the latter there is one life ko threat.
Trying to live in the constricted space is impossible - White can keep Black to one eye.